Petrobras to cut ULSD S10 prices by Real 170 in April

Brazilian state-owned Petrobras confirmed it will cut its diesel prices by an average of R$170/cu m and keep gasoline prices unchanged, effective April 1.

The new Petrobras posted price average will be R$3,550/cu m. According to Petrobras, considering the mandatory blend of 86% diesel A and 14% biodiesel for the composition of diesel B sold at gas stations, Petrobras's share in the consumer price will now be R$3,050/cu m, a reduction of R$150/cu m for each liter of diesel B.

With the announced adjustment, Petrobras has reduced diesel prices for distributors by R$940/cu m since December 2022, a decrease of 20.9%. Considering the inflation during this period, this reduction amounts to R$1,450/cu m or 29%. The company's latest price change went into effect on Feb. 1, when it increased diesel prices by R$220/cu m on average.

The move comes after domestic diesel prices were maintained at a discount to imports throughout most of March. More favorable forex rates for importers and a drop in ULSD futures on the NYMEX helped make foreign products more attractive for weeks.

Platts, part of S&P Global Commodity Insights, most recently assessed the price for ULSD, or S10 diesel as it is branded in Brazil, at Real 3,479.50/cu m on an FCA Itaqui port basis on March 28, representing a Real 95/cu m discount to the reference Petrobras price on an ETM São Luís basis.

FCA markets assessed by Platts have mostly stayed at a discount to Petrobras since at least Feb. 28, with the exception of the Suape port, where prices closed at a premium from March 17 to March 20.

According to the Brazilian fuel importer association Abicom, the S10 diesel import arbitrage window stayed open for 22 days until at least March 27, and also during the same period for gasoline.

Platts is launching FCA price assessments for gasoline at the Suape and Itaqui ports and new S10 inland prices at the Paulínia and Araucária distribution hubs on March 31.